US eases sanctions on Myanmar in rare difference with Aung San Suu Kyi

Last month, Aung San Suu Kyi advised foreign companies not to invest in the state-run Myanma Oil and Gas Enterprise until it became more accountable and open.

In what appeared to be a rare snub by American lawmakers for Myanmar parliamentarian and long-time detainee Aung San Suu Kyi, the United States on Wednesday gave a go-ahead for American businesses to invest in Myanmar's oil and gas sectors – the largest easing of sanctions in the past 15 years.

“The United States is easing restrictions to allow US companies to responsibly do business in Burma," said President Obama, using the old name for Myanmar as Ms. Aung San Suu Kyi does.

Aung San Suu Kyi does support sanctions-lifting by Western countries and investment by Western business in keeping with the reforms undertaken by Myanmar's nominally-civilian government in office since March 2011. But she has expressed caution regarding the Myanmar state-run energy company, long regarded as a cesspit of corruption with tight links to the country's abusive military. Last month the National League for Democracy (NLD) parliamentarian warned that “the Myanma Oil and Gas Enterprise (MOGE) … with which all foreign participation in the energy sector takes place through joint venture arrangements, lacks both transparency and accountability at present.”

The US and some other Western governments have long taken their cue on Myanmar policy from Aung San Suu Kyi, but the Obama administration's decision on investment runs against that well-worn grain.

The US has likely taken what it sees as a pragmatic pro-business policy decision based on what it views as a combination meeting of strategic interests (countering China) and rewards as promised for the Myanmar government undertaking reforms.

The new US policy also allows American companies to bed down with MOGE, though they will be required to report annually to the State Department with evidence that their investments factor in workers' rights and the environment.

Reacting to the US announcement today, Aung San Suu Kyi told AFP that the move was “nothing significant,” and wondered whether the US had sought some form of improved transparency from MOGE prior to the announcement.

Aung San Suu Kyi was recently-chided by the Myanmar government for continuing to call the country “Burma,” the name of choice for opponents of Myanmar's military dictatorship, which issued a decree in 1989 changing the country's name from Burma to Myanmar in a move still controversial due to its arbitrary genesis.

The announcement came just hours after Ambassador Derek Mitchell took up post in Myanmar, the first American emissary to hold that position since 1990, when the NLD famously won a national election but was denied office by the military junta.

The timing should allow American oil and gas companies to position themselves for an upcoming auction of some of Myanmar's offshore deposits.

Aung Kyaw Htoo, assistant director at the energy planning department at the Myanmar energy ministry, told an audience at a June investment conference in Myanmar's biggest city Yangon that there will be “opportunities for co-operation in the Myanmar energy sector,” adding that “there are quite a number of places not so explored or unexplored.”

More specifically, he said that the international bidding process for 25 offshore oil and gas blocks will take place “in two or three months time,” that is, in August or September.

Those announcements came the same week as Myanmar President Thein Sein announced that the coming year would see a "second wave" of reforms in the country, mostly economic.

While Chevron has a presence in Myanmar dating to the pre-sanctions era, other US energy companies were not permitted to invest as sanctions took hold in the 1990s and later.

American companies have pressed the US government to end restrictions on investment, saying that European businesses could edge out Americans.

However, expatriate Burmese lobbies, human rights groups, and several prominent US lawmakers – including a bipartisan group fronted by Sen. John McCain – urged the Obama administration to heed Aung San Suu Kyi's laments about MOGE when fine-tuning sanctions-easing decisions.

“As everyone with any knowledge on Myanmar will attest, the changes we have seen to date are far from irreversible. It is ludicrous to reward the current government’s untested reforms by paving the way for a gold rush. Fighting in Myanmar’s ethnic areas continues and many of the ethnic leaders are concerned that these reforms are just a ploy to pave the way for "development’ projects on their lands,” said Kraisak Choonhavan, AIPMC Vice President and Deputy Leader of the Thai Democratic Party former Thai Senator, according to a statement.

The easing of sanctions also comes as US Secretary of State Hillary Clinton visits nearby Vietnam, Laos, and Cambodia – the latter for a regional foreign ministers parlay – amid a growing geopolitical rivalry between the US and China, which is partly being played out in Southeast Asia.

Laos and Cambodia are seen increasingly as Chinese economic satellites, while Vietnam and Myanmar, which have had close political and economic ties with booming China as of late, have both made overtures to the US.